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Book a FREE consultation
and receive your complimentary eBook

Get started with a free strategy consultation and receive a copy of the Good Fortune Guide – written by James McFall, Managing Director Yield FP and 2020 National Finalist Certified Financial Planner of the Year to help educate you on your Financial Plan.

Maximise Financial Goals for Retirement

Using Home Equity to Maximise Financial Goals & Commitments for Retirement

Results 

Our analysis indicated that by undertaking our recommended strategy, at retirement (age 65 in this case), these client’s could maximise financial goals with an additional $21,661 in net financial assets and $57,647 if they were to make the additional investment with home equity, which includes the increased cost of new insurance for retirement to cover death and disability.

$57,647 better off with our complete advice

High-quality and comprehensive insurance policy

Maximised tax structure to reduce the amount paid

Home equity invested for wealth creation

Overview – Aligning all Financial Commitments

We overlayed a ‘debt-washing’ strategy that involves repaying non-deductible debt and redrawing these funds in a separate loan facility for the purpose of investment. This helped to ensure the deductibility of any interest paid as a result of the investment, combined with looking over all financial commitments and goals they had.

The couple in their late 40s wanted to increase their nest egg for retirement and get advice on:

  • Utilising their home equity for investment and a kitchen renovation
  • If they were utilising their surplus cashflow effectively
  • Updating their insurance for transition to retirement
  • Taking advantage of the historically low interest rates in Australia

Outcome – Home Equity and Tax Structures Work 

Our scenario met all the couple’s goals of planning a kitchen renovation and a better-suited insurance policy, and we additionally saw that if they re-drew even more from their home equity, they could accelerate their wealth creation. We also identified that maximising concessional contributions whilst working and taking advantage of one of the client’s low income, allowed them to take advantage of Spousal contributions to reduce tax payable and the Government Co-contribution.

Financial assets through retirement

This graph illustrates the couple at retirement age and their current projected net financial assets, projected net financial assets with a $30K redraw, and projected net financial assets with a $30K redraw and our additional investment advice.

Important Note 

Any information provided here is general advice only and does not consider your objectives, financial situation or needs. This information should not be taken as comprehensive and does not constitute legal or financial advice. You should seek legal, financial or other professional advice before relying on any content. Yield Financial Planning is not responsible to you or anyone else for any loss suffered in connection with the use of this information. Information is only current at the date initially published.

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